NC Gov. Josh Stein says Medicaid cuts deadline won't change, blames legislature

Dawn Baumgartner Vaughan and Luciana Perez Uribe Guinassi, The News & Observer on Sep 30, 2025

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Democratic Gov. Josh Stein said Tuesday that his administration is not going to move the Oct. 1 deadline for planned cuts to Medicaid, after the General Assembly didn’t send him a bill with funding.

In late July, lawmakers provided funding for Medicaid, but state health officials said the amount fell short. Without more money, health officials in Stein’s administration said they would impose a 3% across-the-board cut in payments to medical providers effective Oct. 1, with steeper reductions for some services — changes that could reduce access to doctors, lead to layoffs or even force some providers to close.

The House and Senate separately advanced bills providing more funding for Medicaid, but the Senate’s bill included a provision to fund the planned children’s hospital in Apex, which House Republicans do not want to fund further. Lawmakers left Raleigh without agreeing on funding, and won’t be back until Oct. 20.

Republican House Speaker Destin Hall told reporters last week that Stein could move the Medicaid deadline date. Stein said that’s a bad idea.

Stein told reporters after a Council of State meeting that the legislature has “not given us enough money for what we know Medicaid will cost us this year.”

“(This) theory, that we’re supposed to spend all of our money in six months and have no money left in the last six months, and somehow expect that they will magically give us the money at that time? When they know we need the money now, and they haven’t given us the money now,” he said.

Stein said he understands that lawmakers have disputes about the state budget, but those issues, including children’s hospital funding, “are not relevant to this question of Medicaid.”

“They both agree we need a lot more money. They both agree on how much more money we need. They think we need a certain amount. We think we need more, but we’re willing to take their number now, trusting that we can fix it that last little bit on the back end, if we have to,” he said.

“So give us that money so that we don’t have to cut the rates we’re paying providers to provide important and oftentimes life-saving health care. They need to set aside their disagreements and focus on the health of the people of North Carolina. They have not done that, and they need to do so immediately,” Stein said.

Stein said they won’t move the Oct. 1 deadline because his administration has already pushed it back months since the fiscal year began July 1.

“We cannot keep pushing these cuts off. What they need to do is give us the money that they know we need, so we can continue to provide these vital services to people who need them,” Stein said.

Deep damage predicted for Medicaid

Dave Richard, a former North Carolina deputy secretary for Medicaid and now a senior vice president with McGuireWoods Consulting, said both the governor and legislature share responsibility for avoiding cuts. He urged lawmakers to set aside other disputes to fund Medicaid and called on Stein to delay the reductions as long as possible.

He said he hopes lawmakers and Stein can strike a deal between now and the legislature’s late October session. Or, if not, at least this year.

“The damage would be deep by then, but ... what you wind up doing is at least be able to rebuild the system over time,” he said.

Cuts will show up first for providers paid directly by the state, while others working through Medicaid’s managed care and behavioral health plans may use levers to delay providers feeling the impact on Wednesday.

But, “what we worry about is that if this protracted debate continues so long that again, you’re going to lose providers, you’re going to really hurt the beneficiaries deeply and the services that they receive. ... It will take a long time to recover.”

Richard lobbies for a mix of health care nonprofits, companies and providers, including the American Diabetes Association, Monarch, and Teladoc Health.

Richard said rate cuts are a “blunt force.”

“The worst thing you can do to control costs is to cut the rate to a provider, because what you really do is impact quality when you do that,” Richard said.

He said other cost-control strategies, such as utilization review — determining the necessity and appropriate quantity of medical services on a case-by-case basis — should be considered instead.